Depending on the type of student loans you will be consolidating, the interest rate can vary greatly. For instance, federal student loan consolidation allows you to obtain a fixed interest rate based on the weighted averages of your existing loans. Private student loan consolidation is much harder to nail down.
Federal Student Loan Consolidation Rates
As far as federal student loan consolidation rates go, the end result will be the weighted average of your loans’ rates, rounded up to the nearest 0.125%. To figure out the weighted average of your loans, first discover their current interest rates and amounts. You can learn this information by completing a “Financial Aid Review” at the National Student Loan Data System.
To get an accurate idea of what your final interest rate and monthly payment will look like, consult the Department of Education’s loan consolidation calculator.
Private Student Loan Consolidation Rates
As I said earlier, private student loan consolidation is definitely harder to pin down for a specific interest rate range. Much like the private loans themselves, credit plays a major part in the process and bad credit can get you a high interest rate or outright denied for a consolidation loan.
At the moment, there also are far fewer lenders that actively perform private loan consolidations. Do your research ahead of time and try to find a co-signer if possible to raise your chance of being approved with a good, low interest rate.
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